The alchemy of money

The Bank of England in the City of London.

MONEY makes the world go round, so you would have thought that economists understand what money is all about.

The former governor of the Bank of England, Lord Mervyn King, has just published a book called The End of Alchemy, which made a startling claim that “for over two centuries, economists have struggled to provide rigorous theoretical basis for the role of money, and have largely failed.” This is a serious accusation from a distinguished academic turned central banker.